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Credit card vs cash

Leaving for London this week.
1) should I get pounds before I leave to have cash for transportation from airport to city
2) should I use credit card for every purchase? I believe my bank charges every time I do, or mayb it’s only when I use ATM?
3) most places take cards, correct? Better to use as CC or debit?
When I was in Ireland last year when I’d purchase something it always came up if I wanted to use dollars or euros.

Posted by
25746 posts

and which way did you choose for paying? Paying in dollars or Euros?

Posted by
25746 posts

number 2 - you are well advised to know the answer to the question number 2 before you travel - get a direct answer.

Posted by
1226 posts

Always choose the local currency when asked on a CC/Debit/ATM card transaction.

  1. This is a 50-50 split in advise on this forum. I am the wait and get local currency when I get there. It is less expensive that way.

  2. We were just in London for a week and used a credit card almost everywhere, just like I do at home. If your bank charges you a foreign transaction fee you need to get a new CC.

  3. See 2 above. CC has better protection than debit. Besides with the conversion from pounds to dollars will you be able to keep your checking account properly balanced/funded. I would rather settle with the bank when I get home and pay the CC bill.

Posted by
6567 posts

Get pounds out of an ATM in the airport for walking around money--but make sure the machine is a bank ATM. Non-bank ATM's take advantage of you on the exchange rate.
My bank (Wells Fargo) charges $5.00 plus 5% currency discount for ATM transactions. I use a credit union ATM when traveling to get more cash for my dollar. I try to use my Capital One Visa for everything I can to minimize the amount of cash withdrawn on trips. Check with your bank to see what they charge you.
And If given the option to pay in pounds or Dollars on transactions, choose pounds in England.

Posted by
21200 posts

It is all personal preference as no one way is absolutely correct.

  1. We always have at least a hundred dollars worth of local currency to get from airport to the city or to buy something in the airport on arrival. Ya, it costs me an extra five buck or so to convert a hundred dollars at home but it is not a big deal in the total scheme of things. And one of the last things I want to be considered about on arrival is finding an appropriate ATM.

  2. We have no fee credit cards but we just find it easier and more convenient to use cash most of the cash. Will pay for higher expenses with a CC. Often the hotel will give a nice discount for cash. And sometimes there is an added charge to use a card so we just plan to use cash. Never had problem with cash.

  3. Never use a debit credit for any purchase. Always pay in local currency. Most places take ccards, some don't or had a min for usage, and sometimes they will slap on an extra fee for using the card. We just use cash and there is never a question. However, if you get to northern Europe - Scandinavia - you will run into a strong preference for cc.

Posted by
38 posts

Thanks everyone. I have Wells Fargo which is the worst with the transaction fees!

Posted by
31290 posts

kel,

Based on my travel preferences.....

  1. I'd suggest getting £50-100 for travel expenses until you get settled at your hotel. I always have cash left over from previous trips, so I just use that.
  2. I normally only use credit cards for larger purchases, such as the hotel bill or restaurant meals, and cash for smaller purchases.
  3. I wouldn't say that "most places take cards". Smaller merchants may not take cards or may encourage cash payments, as they pay a fee to the card companies for every purchase. I'd suggest using a credit card as they provide more protection should you have any problems. I only use my debit card for ATM withdrawals.

One other point to mention is that it's important to notify each of your financial institutions that you'll be travelling overseas, as they may "freeze" your cards when they detect transactions in Europe. I've found that the requirement for notification varies among financial institutions, but it's a good idea to check.

Posted by
2788 posts

Have you read RS “Cash & Currency Tips” located along the lower left hand side of the Travel Forum web page? Always a good place to start your research.

Posted by
18892 posts

I have two no-transaction-fee mileage credit cards, so I prefer to use them when I can, but there is no problem with using cash instead. Keep in mind, however, that going the cash route will almost certainly mean you are carrying around considerably more money than I do and will have more to lose if a pickpocket decides to focus on you. Be sure you have a secure way to carry anything you need or want to have with you that exceeds the modest amount of money that must be immediately accessible.

Posted by
3213 posts

Just returned and almost every place accepted CCs. Think I only came across one small store that didn’t. I used cash for most meals and incidentals since I had plenty left over from my last trip. I used a CC for any entrances, trains, or to top off my Oyster card. The hotel was prepaid.

Posted by
257 posts

Wells Fargo has a way to create a Travel Plan in their Account section, you fill out the when and where that you're going, and they won't shut down your card. It's worked well for me in the past. They also have bank branches over there (at least in the Hampstead area where I lived and worked for the Girl Scout hostel for 2 months, that helped), so that made it better for fees if I went to their ATM/bank. Helps to go when the bank is open, just in case there's a card glitch.
The UK has a completely different (chip&) PIN system on their cards than we had here the last time I went, I didn't have the ability to put in a PIN anywhere I went for any debit transactions, I was always signing for the credit card. I found it was best to take some time to go in and talk to my bankers before I left home (and an in-person talk with my mobile phone company helped too), to get all the details I could of what would and wouldn't work over there, fees, etc. They weren't always correct, but at least they gave me some helpful information, and would remember my travel plan and not shut down my card. :) If the bank offers a way to get some GBP before you leave and you want to do that, you can, but I found it really unnecessary, there are ATMs all over the airport and it was pretty easy. Also my branch required people to order foreign currency at least a week in advance because I didn't live in a major city (it was a minor one apparently :) in CT). So it may not be the easiest thing to fetch before you fly, if you're leaving soon.
Yup, I always chose the local currency instead of dollars, because I looked carefully at the options and the dollars option & did the math, & it was WAY higher to pay in dollars than it would be with the current conversion rate, so I knew that was a rip-off, in a couple of restaurants that tried to get me to do it. It was way higher than any fees I would be charged from my bank, too. Just a matter of knowing your numbers.
The tricky thing for me there in London was valuing my coins, usually here I'll just throw them in my bag, but there after a couple of weeks I realized they were MUCH higher value than here and I needed to keep track of them more. I bought a little changepurse so I could manage them better. Back then a £5 coin was worth $9.40, so I couldn't just toss them in the bag carelessly :)
Hope you have a really great time!
-Alison

Posted by
1536 posts

We arrived in England on the Queen Mary 2. Taxis dud not take credit cards. And the cruise terminal did not have an ATM. We had to have taxi stop at ATM before dropping us off at hotel.
You may want to bring £50-100 so you don’t have to remember to find ATM after clearing immigration.

Posted by
9794 posts

I spend about three months per year in London so I will relate my experiences.

1) The ATM machines at LHR are from Travelex. It is a foreign exchange company but others have said their exchange rate is similar to local banks. Most taxis now take credit cards and you can use them to buy an Oyster Card or an airport bus ticket.

2) I rarely pay for anything in cash. If it's under £5 I will.

3) Never use a credit card as a debit card. It's like borrowing money from your bank at high interest rates. Only use debit cards in ATM machines.

Find out what your bank charges for foreign currency exchange. If it is more than what you are offered with pounds vs dollars, then pay in dollars. But in most cases, it is better to pay in local currency.

For your next trip, why don't you apply for a no foreign transaction fee credit card?

Posted by
8889 posts

but others have said their exchange rate is similar to local banks.

It is not the ATM (or their owners) that does the exchange. What should happen is they charge your card the exact amount you withdraw, and your credit card company (visa, mastercard) does the conversion. What you need to watch for is ATM charges, which are the same whatever currency your account is in.
Thta is, except if you get conned into the dreaded "DCM". If the machine asks if you want to pay in your currency, the answer is NO.

Posted by
3465 posts

Find out what your bank charges for foreign currency exchange. If it is more than what you are offered with pounds vs dollars, then pay in dollars. But in most cases, it is better to pay in local currency.

I am only speaking related to US banks, so if you live elsewhere this might not apply to you.

Whether or not you get charged a foreign currency fee or not has nothing to do with what currency the transaction is in, it is based what country the transaction occurs in. If your bank charges a foreign transaction fee, you will be charged that same fee even on dollar transactions. Why? Because they can. So if you choose dollars instead of Pounds, you already loose due to the inflated rate used, and then you get charged the same fee on top of that so you get double hit and loose twice on each transaction.

Just don't do it. Get a credit/debit card from a bank that doesn't charge any fees for anything in the first place. Then never accept being charged in dollars outside of the US.

Posted by
4368 posts

I wouldn't say that "most places take cards". Smaller merchants may not take cards or may encourage cash payments, as they pay a fee to the card companies for every purchase.

Actually, in the UK most places do take cards even the smaller merchants, even a couple of traders at the tiny monthly market in the middle of the New Forest that I trade at take cards. I can think of one restaurant local to me that doesn't accept cards but that's because, I suspect, it's something to do with tax avoidance. Every other retailer, restaurant, pub etc local to me accepts cards, it's ubiquitous these days.

In London it's perfectly feasible to spend the whole duration of your time there without using cash.

Posted by
25746 posts

As I have said elsewhere on these Forums, both in London and at home 60 miles away from London, I keep one or two cards in my wallet with maybe £10 in notes and a small handful of coins.

I almost never take my wallet or coins out of my pockets except when emptying my pockets at home.

Virtually all my purchases, as small as a chocolate bar and as large as a 50 inch TV are all made by Apple Pay on my phone. There are a handful of places which require me to tap my physical card. On Friday I used a debit card in a supermarket so that I could get cash back to pay the guy who services my home heating system for my annual checkup - he only takes cash, but he's a mate.

Use cash if you want but you will surprised by the number of folks happy to have a tap.

Why the coins? To park the car. Usually I use the app or the phone, but especially in smaller towns and Oxford the coins is easier.

Posted by
4528 posts

Over half the card transactions in the UK are contactless. Useful if you can equip yourself for that one way or another rather than ending waiting for someone to find a biro that works.

Posted by
3173 posts

Leaving for London this week. 1) should I get pounds before I leave
to have cash for transportation from airport to city

No. You will be robbed blindly by your local bank if you do that. You can get cash in Central London's cash machines after you take public transport into the city. I also recommend you avoid Travelex at the airport -- highway robbery. Find out from your bank if it has reciprocity with any British banks so you aren't charged a fee for you using an ATM. For example, I only pull cash from Barclays cash machines as I am a Bank of America client. If you have credit union ATM card, there already may be no fees in place when you take out cash at a UK bank's cash machine. Find out today as you are leaving soon.

If you plan on returning to the UK within a 5 years or so, take out £s from the cash machine to bring home. The exchange rate is fantastic for you and the £ WILL REBOUND once things calm down with the UK leaving the EU. I'm planning to do just that on my trip in March.

2) should I use credit card for every purchase? I believe my bank
charges every time I do, or mayb it’s only when I use ATM?

It depends on your credit card. I have a Travel Rewards Visa card that does NOT charge international fees. If you don't have a credit card like that, look at all of your credit cards and find out which has the cheapest int'l fees and then use that exclusively. Hopefully that one will also have some kind of points program.

As Nigel mentioned, make whichever card you choose with the cheapest int'l fees as your Apple Pay/Android Pay/Samsung Pay card. Contactless is great.

3) most places take cards, correct? Better to use as CC or debit?

I never use debit to pay for any product or service; the money comes out of your account immediately. If there is a problem, you have to waste time with your bank trying to get your money back. As for "most places" taking plastic? Perhaps a few small shops may not but London is pretty easy.

When I was in Ireland last year when I’d purchase something it always
came up if I wanted to use dollars or euros.

Always pick the local currency. NEVER choose dollars as you will be ripped off royally.

Posted by
2204 posts

You can disregard the above comment about Travelex in Heathrow being "Highway Robbery". We tested this ourselves and the exchange rate was the same one as was performed at a NatWest Bank ATM in town 70 minutes later. Yes, Travelex as acompany should be trashed for their money-making policies, but unless someone has a recent receipt showing a rip-off exchange rate from an ATM of theirs at Heathrow (and without DCC having been inadvertently applied confusing this rate), they are safe to use (as they are the only ATMs available there)

Posted by
2204 posts

Incidentally, if you have a credit card with no foreign transaction fee and it has cashback rewards, it will be cheaper to sue your credit card rather than cash whenever possible, since there will always be a small percentage loss on the exchange rate (up to 1/2 a percent) from the ATM simply for network use), but your credit card should convert at the exact exchange rate and get you your full cash back. For example, we have a card that gets 3% on restaurants and 2% on groceries (in addition to its standard 1% rewards), and both of these types of merchants code correctly to the card as we use it outside the US.

Posted by
3173 posts

You can disregard the above comment about Travelex in Heathrow being
"Highway Robbery". We tested this ourselves and the exchange rate was
the same one as was performed at a NatWest Bank ATM in town 70 minutes
later.

Ahhhh, then avoid NatWest, kel.mel. How good to know that! :-)

Posted by
25746 posts

There have been several reports that the Travelex machines at Heathrow now charge no more and no less than the big high street banks in the UK - as long as you don't accept DCC at their or others' machines.

Posted by
18892 posts

This is not the only report I've seen on the forum about a commercial ATM at an airport that turned out to be fine to use. I believe I ended up using one of those myself in Budapest (though not Travelex) without additional cost. When you're specifying the amount you want in the local currency, it's totally clear whether you receive the full amount you asked for; the question is whether you are also charged an additional fee. I have not read any reports of ATMs that charge separate fees without disclosing that information on the screen in time for the customer to cancel the transaction if desired.

If you accept dynamic currency conversion, all bets are off, and it won't be only non-bank ATMs that are an issue.

In addition to the need to avoid the apparently-increasing numbers of ATMs that charge fees, I had a couple of suspicious experiences on my last trip that led me to believe the ATMs were refusing to give me money because I declined DCC. The ATMs belonged to the same bank but were in different locations. I think it happened in Prague, but I may be misremembering the location.

Posted by
2204 posts

Okay, Continental, instead of the snide response maybe you can explain why my transactions from NatWest and Travelex were at the exchange rate as shown online for that day (less the approximately .3 of one percent that always gets tacked on, which, by the way, is the less than the 1% that most appear to accept as the norm). How about the next time you are in Heathrow you pull 20£ from a Travelex ATM, and then make a similar transaction from your favorite ATM in town and see how much your account has been debited in $$s.

Posted by
3465 posts

There are 3 different types of Travelex you may run into at Heathrow on arrival into the UK:

  1. Currency exchange booth. Avoid it. This is where you get the worst bad exchange rate.

  2. Travelex cash dispensers. These are not ATMs no matter what they may look like. Usually located next to the exchange booth, they are nothing more than all electronic exchange booths. How can you tell if you pick one? When you enter the amount of Pounds you want, it will show you a screen with wording similar to: "Our offer for the day: GBPxxx will cost USDxxx at a rate of y.yyy". In other words, they are selling you Pounds, not making a withdrawal from your account. There is no option on these machines to bypass the conversion and just withdraw Pounds. Cancel and run away. Good news is these are disappearing, hopefully because everyone caught onto their scheme and they were not being used.

  3. Travelex ATMs. Your only choice now at Heathrow due to their monopolistic contract. These work like any bank ATM you would find elsewhere in the London area. They do not charge extra for any withdrawals (yet). You will get the same rate there as at a bank owned and operated ATM in the heart of London. Just make sure it doesn't offer to charge you in USD or whatever your home currency is.

Posted by
21200 posts

I think phrases like, "robbed blindly by your bank", or "highway robbery" or "rip off exchange rate" do little to advance the discussion and causes needless concerns with inexperience travelers as to these questions. You are being provided a service, it costs something to deliver the service or convenience and someone has to pay for it. It is just all hyperbole but not all recognize it as such. And at the end of the day it is not that big a deal.

Posted by
3533 posts

The original poster can see from this long thread that there are plenty of contradictions. It's too late for my first advice for a solo traveller, which is to carry at least two credit and two debit cards from separate institutions, preferably with separate credit card companies (MasterCard/Visa) and never carry all of them in the same wallet. And as has been said, never use a credit card to borrow money from an ATM.
Banks make money out of cards two ways: A fee for foreign exchange, and by exchanging at a rate that's beyond the daily exchange. You can't do anything about the exchange rate, and most bank machines use the same rate as in an over-the-counter transaction at the bank itself. The fees, however, do vary depending on the operator, and that's where you can use some caution. A private machine near the W.C. at the back of the pub should be avoided.
My tactic is to get cash from an ATM at the airport. Even if it is Travelex, the difference isn't enough to stress over. Then I will get more cash from a bank machine handy to my hotel, and pay cash for all transactions except big one like a fancy dinner or the hotel account (I save a little money that way.) Credit cards are as vulnerable to theft as cash and much harder to replace. The safe at your hotel is more secure than a pocket or purse.

Posted by
21200 posts

Ya, there are exception to all studies -- we are in that "wealth" class and still pay a lot of things, especially traveling, via cash. Maybe it is coming out of a depression family but I always like the feel of cash in the pocket.

Posted by
4528 posts

A small side point is that retailers on many merchant accounts pay higher charges, maybe as high as double, for transactions on non-European cards compared with European ones. Not something that the user pays of course, but it might result in encouragement for you to pay by other means if they work out where you are from ….

Posted by
9794 posts

A new coffee place opened up near me in London.. (An independent not a chain. ). I went in to try the coffee. It was £2.90. I pulled out a £5 note. They pointed to a sign:

"We are a cashless business. We do not accept cash. "

The future?

Posted by
4528 posts

There is an Etsy shop near me that is card only.

Handling cash is not free.

Posted by
8889 posts

Frank, Marco, is that legal?
What happens if you answer "but I only have cash" after they have served you the coffee?

I am "old school" and prefer cash for anything other than large purchases (under about £/€/CHF 100). I get cash out of the cash machine 1-2 times per week, and otherwise never use a card most weeks.

Posted by
9794 posts

Frank, Marco, is that legal?
What happens if you answer "but I only have cash" after they have served you the coffee?

They don't serve you until you pay.

I have stayed in three hotels in Scandinavia this year that state on their website they are cashless.

It's the way of the future. Younger folk, and I can say that as I am no longer one, seem to pay for everything with either a contactless card or their phone.

Posted by
5654 posts

Frank, Marco, is that legal?

Here in the US it depends on "states rights" (Tenth ammendment):
https://www.eater.com/2018/2/15/16974980/cashless-restaurants-credit-card-only-legal-problem-discriminatory

A private business like a restaurant is not legally required to take
U.S. currency. Massachusetts is the exception: A 1978 law states that
no retailer “shall discriminate against a cash buyer by requiring the
use of credit,” the Boston Globe reported.

Otherwise, federal law leaves these payment decisions up to states....

Posted by
21200 posts

Is it legal??? Obviously that depends on the country and their rules and laws around financial transactions. In the US, it is technically illegal. All of our currency carries the phrase, "This note is legal tender for all debts, public and private." Now I am sure that legal scholars would have fun with that statement. But on the face, it would appear, in the US, you could not refuse to accept US currency IF there is a legal debt established between the two of us. i.e. -- if I order something, your serve it, and the debt is establish. However, if you declare up front, before the debt is established, that you refuse to accept US currency then that probably is a legal situation. There has been some common law established around the form of payment. For example, a court ruled that a traffic court did not have to accept a hundred pounds of pennies for the payment of a $1000 traffic ticket or something like that.

But it would not surprise me to see us move away from metal/paper currency. The cost of minting money is expensive. Personally think the US should do away with both the penny and the paper dollar.

Posted by
5654 posts

What do our UK friends think of this Guardian story? (After all it is the Guardian.)
https://www.theguardian.com/money/2018/oct/01/cashless-britain-banks-atms

Last year, at the start of the summer, the last bank in Dorset seaside
resort of Lyme Regis closed. The only way for its 3,600 residents and
thousands of tourists to get hold of their money was to join the
lengthy queue at the post office or via a single ATM which regularly
ran out of bank notes. Those who needed an over-the-counter service
had to make the six-mile commute to the nearest bank, in Axminster.
Residents with no access to a car or online banking have been left
stranded and even ice-cream sellers have been forced to invest in
card-payment technology.

Meanwhile, critics are blaming Visa and Mastercard along with the
banks for squeezing out free-to-use machines by ensuring they become
unprofitable.

“Visa and Mastercard’s main objective isn’t to win ATM market share
from Link, but to drive consumers away from cash by killing off ATMs,”
says Mark Falcon, former director of regulation and strategy at the
Payment Systems Regulator (PSR) and founder of financial consultancy
Zephyre. “This is because card payments generate much higher fees than
cash and ATMs.”

Posted by
4528 posts

In the case of the shop I am thinking of, there is a notice on the door. Since they are selling goods the concept of it being consumed before payment doesn't arise.

For some businesses the use of cash can be as low as 20%. They make a judgement whether they really lose business by eliminating cash, weighed against the savings of not having to reconcile tills at the end of the day or shift, go to the bank which may be some way away etc.

I probably make fewer than 5 cash transactions a month.

Posted by
3465 posts

Well, the credit card networks sure hope the future is cashless. It means more income for them through the fees the merchant pays to allow your card to be used. The networks all argue that it is safer, less costly, more efficient, and so on , to accept only cards and no cash. I guess it just depends on how much the business has to pay each company in the chain. When I visited Philadelphia a couple years ago, almost none of the smaller shops took credit or debit. I asked one shop owner and his response was: "It is less costly if we were to get robbed of my daily cash once a month than to pay the fees every day for accepting credit."

Posted by
5654 posts

... if we were to get robbed of my daily cash....

Just got back from the dentist where I read an Atlantic Magazine article waiting for my turn. The essence is that in Sweden bank robbers are in a dead end job. In a recent year, Sweden experienced only two bank robberies in contrast to over a 100 some 8 or so years ago. Article said that half the Swedish bank branches no longer have currency.

It's not worth the criminals time to mug people for cash or rob banks. The Atlantic article reports that criminals have switch to stealing Apple electronics and owls. Apparently a protected species of owls is worth a lot of money.

Posted by
4528 posts

Merchant fees in the USA are far higher on average compared with Europe as they have been constrained to a maximum by law. That is how card issuers can afford a load of 'free' incentives because they are paid by the other party in the transaction.

Posted by
21200 posts

Nothing in business is free. Although some like to think that somethings should be free. The are costs associated with handling cash, and costs with handling credit cards. I was associate for years with a company that primarily had phone orders that could easily go past a couple thousands dollars. I think our less expensive item was just under $500. I think our card fees were about two percent and most of our business was credit cards with mailed in checks (remember those things). But everything we handled had a cost associated with the handling -- checks, cash, credit cards. And all carried some risk of non-payment. Fortunately for us we didn't delivery the product until payment cleared so we had min lost in that area.

Someone posted that no cash meant that no balancing of the cash draw at night. True but we had to balance our credit card charges each night against the sales for the day and what we report to the credit card network. We occasionally would miss one or two or double charge a client. etc.,, So the accounting and double checking doesn't end when cash goes away. I think I read somewhere that handling cash can actually be more expensive because of a number of hidden or indirect expenses associated with cash.

One of these days we will all be on Apply Pay.

Posted by
4528 posts

Recent BBC report from a few days back on this very subject, reporting on a cashless pub, amongst other businesses.

There was a YouGov poll after this report, which split fairly evenly - 48% were very comfortable or comfortable with this, with 42% being somewhat or very uncomfortable (+ 10% DK)

Posted by
21200 posts

And Americans are too focused on being clean - especially hyper clean.